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Comcast says some stimulus bidders may be ineligible
Bloomberg News
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Published: 10/27/2009 12:01 AM

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Comcast Corp. said some applicants for U.S. stimulus funds to expand high-speed Internet want to build in places already served by the company, which may violate eligibility rules.

The largest U.S. cable-television service will file data supporting the assertion on Oct. 28, David Cohen, executive vice president at Comcast, told reporters in Washington today. The money is to be distributed under a $7.2 billion program that aims to accelerate the deployment and use of high-speed Internet service in areas that don't have it.

The Senate Commerce Committee is to hold a hearing tomorrow on the broadband program, which is run by the Commerce Department's National Telecommunications and Information Administration and by an arm of the Agriculture Department.

"Those applications don't qualify for funding primarily because they are applications to provide service in areas where there is already broadband service," Cohen said. He didn't provide an estimate of how many applications would be implicated, and said Comcast would point out only applications that would serve areas where it provides Internet service.

"We would mostly care if it goes to an area where we're the broadband provider," Cohen said.

Comcast is to make its filing with the NTIA and the Agriculture Department's Rural Utilities Service, said Sena Fitzmaurice, a Comcast spokeswoman.

The Washington-based National Cable & Telecommunications Association, a trade group, in an Oct. 19 letter to the agencies said funding had been sought in "hundreds" of areas where its members provide broadband service.

Gain Control

Cohen said he couldn't comment on Comcast's bid to gain control of NBC Universal, General Electric Co.'s media unit.

GE and Philadelphia-based Comcast are in talks to form a venture that would own New York-based NBC Universal, people with knowledge of the situation said Oct. 1.

A Comcast purchase of a stake in NBC Universal would face scrutiny from Obama administration regulators who have said they will aggressively investigate whether mergers stifle competition.

"We wouldn't sign up to do a transaction that we didn't think could survive regulatory scrutiny," Cohen said.

Cohen also said Internet services including those provided by Google Inc. should be brought under so-called net neutrality rules that Comcast opposes, and that are being considered by regulators. To the extent that rules exist, "they should apply throughout the Internet" and not just to Internet service providers, Cohen said.

Crafting Rules

The Federal Communications Commission voted on Oct. 22 to begin crafting rules to forbid Internet service providers such as AT&T Inc. and Comcast from favoring or blocking Web traffic, and to extend the regulations to wireless services. Rules aren't necessary and could deter investment, Cohen said.

Cohen said Google's voice service operates partly using the Internet and violates net neutrality precepts because it keeps users from connecting to some legal services, such as free conference calling. "Imagine if we were to block Skype or Vonage," two low-cost calling services, from making such connections, Cohen said. "People would go ballistic."

Google Voice, a free service, lets customers use one phone number to get calls on multiple devices and to access voice mail.

'Entry Ramp'

FCC Chairman Julius Genachowski said at a news conference Oct. 22 that "the whole proceeding has always been about Internet access providers" who he said provided "the entry ramp" to the Internet.

"We should be very cautious about moving from tackling issues presented by the on-ramp providers, to the Internet itself," Genachowski said.

"Network neutrality has always been about protecting and promoting open broadband pipes to the Internet," said Washington-based Google spokesman Dan Martin in an e-mail. "Google Voice is a free web-based application, not a network, and in no way sells or otherwise provides consumer broadband access to the Net."